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TFSA Transfer Fee Question
August 27, 2019
9:13 pm
Mayor
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Hi Everyone,

I currently have a TFSA with Vancity CU for my emergency funds and want to transfer the monies to another bank/CU to obtain a better TFSA rate (currently getting 0.75%). This blog has been extremely resourceful and I'm considering Alterna Bank, Tangerine and Oaken but leaning more towards Alterna Bank.

I wanted to confirm what fees you typically incur when transferring your TFSA from one financial institution to another? Specifically, I'm a bit confused if you incur a transfer fee of $45-$50 or if this fee can be avoided by not closing your account?

Thanks for you insights.

August 27, 2019
10:16 pm
GICinvestor
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Transfer fee is for each transfer. Has nothing to do with account open/closed or still is funded. You can also “withdraw” in December free and redeposit, elsewhere, January 1. Watch your MY ACCOUNT for any further deposits for 2020 just as a safe guard to not over contribute.
You can redeposit the principal and interest made while it was in the TFSA. BUT not, of course, the interest made while NOT in a TFSA Account.

Consider staying in BC? Then Oaken (GIC only, no HISA) or People’s Trust. Both CDIC. Sometimes PT has a good HISA rate too. And both, I believe, do not charge for transfers.

Or Manitoba, Hubert I believe does not charge for transfers. Hubert has both GIC and HISA and sometimes a decent 1 year GIC.

I was just thinking ahead for you, to avoid transfer fees.

I am with Vancity too, but only for day to day banking. GIC rates are not that great, but I really like their service in Pitt Meadows.

August 27, 2019
11:27 pm
Loonie
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Normally, with financial institutions (FIs) that charge a transfer fee, they will charge it for either a partial or full transfer, so there is not usually any advantage in transferring only part of it.

The transfer fee you would have to pay right now is whatever VanCity charges. (I don't know.) Such fees are typically $50 or more.

Bear in mind that the FI to which you are transferring your funds may reimburse the transfer fee. This is generally true of FIs who, themselves, do also charge a fee when you transfer out. There is usually a limit on how much they will reimburse. YOu need to ask for this in advance, and then confirm it after the transfer is complete.

The following FIs do not currently charge a transfer fee (although this could always change): Hubert, Peoples Trust, Oaken, Achieva. However, Oaken does not offer a savings account TFSA as far as I know.
Tangerine's rates are not likely to be good over the longer term. Of the ones you have mentioned, I too would go with Alterna. They are steady, no-fanfare kind of outfit.

August 28, 2019
1:25 am
Rick
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Loonie said

The transfer fee you would have to pay right now is whatever VanCity charges. (I don't know.) Such fees are typically $50 or more.

 

From the website, effective July 20019
RRSP - RRIF - TFSA - RDSP fees
Transfer to other financial institution $25.00

Pretty reasonable.
See if it's worth it to pay the fee, or just leave it in a Van City until December, deposit it into your checking and transfer to what ever FI you choose in January. With Van City only paying .75%, might be worth your while to pay the fee and move it to a higher interest rate elsewhere. Do the math. Personally, I like to withdraw it on Dec 31 and redeposit on Jan 1st, but I'm not getting .75% either.

August 28, 2019
9:08 pm
Mayor
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I did consider People's Trust but dislike not having access to an ATM network for my emergency funds. I was leaning towards Alterna Bank because they are offering a TFSA HISA of 2.30% and have access to ATMs in the Exchange Network.

I'll use your approach Loonie and request Alterna Bank to cover the transfer fee and open a chequing and TFSA account to avoid the transfer fee in the future.

Thanks for your sharing your knowledge and advice.

August 28, 2019
10:00 pm
Loonie
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You're welcome.
Just to be clear, AlternaBank WILL almost certainly charge a transfer fee when and if you move your TFSA out of there. I believe the current fee is $50 but am not certain as I have never had a TFSA there. However, you may get that reimbursed by the next FI you use.

August 29, 2019
10:12 am
GICinvestor
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I think you might want to look at Implicity in Winnipeg too. See here https://www.implicity.ca/ They are very comparable to the ever so loved Accelerate and they have added online GIC ordering, which I have not tried, and their rates used to be very competitive. But not to worry as their seems to be some unsettling times, rate wise.

They do have cheques, Ding Free ATM cards and push/pull. They have it all!!

Here is their fee page. YIKES $75 transfer out fee for registered accounts. https://www.implicity.ca/Products/ServiceFees/

Check their website for rates or also look here. https://www.highinterestsavings.ca/chart/

August 29, 2019
10:24 am
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Mayor said
I did consider People's Trust but dislike not having access to an ATM network for my emergency funds. I was leaning towards Alterna Bank because they are offering a TFSA HISA of 2.30% and have access to ATMs in the Exchange Network.

I'll use your approach Loonie and request Alterna Bank to cover the transfer fee and open a chequing and TFSA account to avoid the transfer fee in the future.

Thanks for your sharing your knowledge and advice.  

PT does have push/pull.

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